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19 February, 23:57

The gross earnings of the factory workers for Larkin Company during the month of January are $91,000. The employer's payroll taxes for the factory payroll are $7,700. The fringe benefits to be paid by the employer on this payroll are $5,100. Of the total accumulated cost of factory labor, 84% is related to direct labor and 16% is attributable to indirect labor. (a) Prepare the entry to record the factory labor costs for the month of January. (b) Prepare the entry to assign factory labor to production.

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  1. 20 February, 00:15
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    The journal entry is shown below:

    (a) Factory Labor/Expenses A/c Dr $103,800

    To Factory wages payable $91,000

    To Employer payroll taxes payable $7,700

    To Fringe benefits payable $5,100

    (Being labor expenses are recorded)

    (b) Direct labor A/c Dr $87192 ($103,800 * 84%)

    Indirect labor A/c Dr $16,608 ($103,800 * 16%)

    To Factory Labor $103,800

    (Being factor labor is assigned)
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